Greece Has Effectively Excluded Itself From The Eurozone

In Greece, three-quarters of the independent doctors, lawyers,
and engineers declare taxable income below the existential
minimum. Tax fraud amounts to €20 billion per year (8.5% of GDP).
And tax dodgers owe €63 billion in unpaid taxes (27% of GDP).

The country is bankrupt and has been kept afloat by the Troika
(EU, ECB, and IMF), of which Germany is by far the largest
contributor. And the numbers are staggering: the first bailout
package of €110 billion, the current bailout package of €130
billion, and the debt swap of €107 billion, in total €347
billion, amount to a mindboggling 150% of Greece’s GDP!

And even that won’t be enough, apparently, according to a
crescendo of German politicians, among them Finance Minister
Wolfgang Schäuble who inserted these devastating words into his letter to the members of the
Bundestag: “I cannot give any guarantees that the path
taken will lead to success.” And: It’s possibly “not the last
time that the German Bundestag will have to deal with financial
aid for Greece.” Thus, he put a third bailout package on the
table.

On Monday, the Bundestag will vote on the second bailout package
of €130 billion plus €24.4 billion from the first package that
hasn’t been paid yet, a total of €154.4 billion. There is
resistance within the governing coalition. And the opposition SPD
and Greens accused the government of deception. The
documents they received were incomplete, they said. Though there
were several hundred pieces of paper, they didn’t include the
most important: an analysis of Greece’s ability to service its
debt in the long term. Most likely, they said, Greece would need
to be bailed out again after 2014 because it won’t get its
finances in order by then, and won’t be able to fund itself in
the capital markets. €50 billion would be needed, they estimated. And yet, the SPD and the Greens
will largely vote for the bailout, which is expected to pass.

But it’s a theoretical approval. Theoretical, because in
reality, payment of the tranches will be conditioned on the
implementation of all promised measures down to the last
iota, however Teutonic they may be—and it’s almost certain that
Greece won’t be able or willing to comply with all of
them. The latest iota is a leaked document that specified that 160
employees of the German Ministry of Finance were ready to head to
Greece to help install a functional financial administration.

“The European Union is suffering under Germany,” said Georgios
Karatzaferis, president of the right-wing LAOS party. He accused
Chancellor Angela Merkel of trying to “impose her will on
Southern Europeans.” And he wasn’t the only one lashing out. For
the bitter turmoil inside Greece, read.... Greece at the Point of no Return.

In Germany, the chorus for strict implementation has been loud.
While Greece cannot be forced to implement and stick to the
austerity and reform package, Bundesbank President Jens Weidman
said Friday evening, “it must be clear that
more financial means cannot be made available if Greece does not
adhere to the agreements.”

And Merkel’s coalition partner, the CSU, has been relentless.
Among them, Hans Michelbach, who said that pressure for reform must be
increased. Greece “overburdened to excess” the patience
of the Troika, and that could not continue. “There can only be
new money if all demands for the previous tranche have been met.”
That would include privatizing its state-owned enterprises. And
about the third bailout package that Schäuble couldn’t exclude?
“We’re giving Athens an additional chance with the second
package, but the country has to use that chance. One thing is
clear: since Greece already didn’t use the first chance, there
won’t be a third chance.”

So the plan becomes clear. And it is now politically correct to
pronounce it in public: Greece should decide on its own to leave
the Eurozone. This way, no politician outside Greece can be
blamed.

“The chances for Greece to regenerate itself and become
competitive are certainly greater outside the Monetary Union,”
said Minister of the Interior Hans-Peter
Friedrich (CSU). “I’m not talking about kicking Greece out, but
creating incentives for an exit that it can't refuse.”

Luxembourg Finance Minister Luc Frieden said it too: “If the Greek people or the Greek
political elite do not apply all of these conditions, they
exclude themselves from the Eurozone.” All of these
conditions. Then the crucial words: “The impact on other
countries will now be less important than a year ago.” And that's
has been the strategy all along. Read.... Firewalls Are in Place, Markets Are Ready: Now
Greece Can Go to Heck.